Forex headlines for September 3, 2014:
- Bank of Canada leaves rates and neutral bias unchanged
- BOC says US recovery “back on track”, exports “turning the corner”
- July 2014 US factory orders 10.5% vs 11.0% exp m/m
- July capital goods orders non-def ex air revised to -0.7% vs -0.5% prior
- Beige Book: Saw moderate or modest growth in 10 of 12 regions
- US vehicle sales blow away estimates. Sales rise to 17.5M pace versus 16.6M expected
- Fed’s Fisher: Getting close to new exit strategy
- August 2014 US ISM New York 57.1 vs 68.1 prior
- Ukraine sends mixed signals on ceasefire
- German official: Ukraine truce would let Russia avoid sanctions
- Gold up $4 to $1269
- WTI crude up $2.55 to $95.43
- S&P 500 down 1.5 points to 2001
- AUD leads, GBP lags
It was a back-and-fill sort of day after the big moves to start the week, with the exception of the pound, which continued to fall and the Australian dollar that made a nice, solid move to the upside.
EUR/USD was higher for the second day in a row. It was the first two-day winning streak since Aug 14-15 and the cumulative climb was only 20 pips. But not losing ground is a winning day for the euro lately and all eyes are on tomorrow’s ECB decision.
USD/JPY finishes at the lowest levels of the day at 104.77 after hitting 105.31 in Asia. It was a slow steady slide and wasn’t helped by some mild pain in stocks. It still pales in comparison to the 100 pip gain on Tuesday.
Cable was mostly stable in US trading but traced out a marginal new medium-term low at 1.6441. An overnight bounce tested 1.6500 but the sellers were waiting and it was straight down from there.
USD/CAD was in focus due to the BOC decision. A slight upgrade in US growth prospects and exports was enough to spark some USD/CAD selling and the pair fell to 1.0870 from 1.0910. Some solid bids at 1.0870 kicked in and the pair bounced to 1.0886 late in the day.
The Australian dollar was impressive. There was no move for an hour after the RBA decision but then the Aussie started moving higher and hasn’t stopped. Solid 70-pip gain on the day and an outside reversal.
Speaking of turnarounds, EUR/CHF and oil posted some whipsaws that are worth mulling over.